Virgin buys a bit of Northern Rock

Posted in 'Banking' by Barry Stamp

18 November 2011

Virgin Money has finally managed to pick up part of Northern Rock for the ‘Boeing’ sum of £747m, taking most of the rescued back out of state ownership and back into private hands, and after being turned down by the Government of the day as a potential suitor some years ago.

We reported in June 2009 that Virgin had long been looking to pick up part or all of Northern Rock, and in the absence of success on that front, they bought at that time a little known regional bank from Somerset called Church House Trust. This gave Virgin the all-important banking license that it needed to have before it could start to become a high-street bank in its own right.

Virgin already provides millions of us with everything from public transport to soft drinks and holidays, and the day when we do our day-to-day online banking with them could now be just around the corner.

Virgin said historically that one of the main reasons for their wanting to enter the banking market is to try and increase competition and generate better deals for consumers as a result. This is something that is likely to be very welcome given the current negative feelings held by many consumers about a number of our once strong banking brands, as our annual Banking and Credit Card Survey has highlighted.

The one that Virgin has to beat is First Direct, which consistently is praised by its customers, and Co-operative Bank also stands with them in front of the rest of the pack.

While Virgin gets its act together to set up an online banking operation based on its new acquisition, which we think will take at least 2 years, (there’s a challenge for all of you at Virgin Money), it’s certainly worth thinking about switching banks, especially if you’re looking to revamp your finances for the New Year, or are feeling disillusioned with your current provider. Once you find how easy it is to switch, you can always make another switch to Virgin once their banking service eventually takes off.

Our 2011 Banking and Credit Card Survey is still open to receive your feedback on what you think about your current bank or credit card supplier. Please let us knowwhat you feel, so we can publish the results to guide others towards better service from our banks.